Post WASDE thoughts: weekly market outlook, June 16th-20th

Jeremy

Doetch: Well, hello and welcome to another Ag View Pitch. We are joined by Greg McBride, the Director of Brokerage at Allendale Incorporated. Greg, how you doing?

Greg

McBride: I'm doing great, Jeremy. How are you?

Jeremy

Doetch: I'm good. So, uh, today I get to be your host, uh, Jeremy Dutch here with Ag View Solutions. We're looking at a new marketing week, the week of June 16th through the 20th. I got to be honest, Greg, I can't believe it's already like, you know, Father's Day weekend. And, you know, we're at this point in the year, it just seems like this year has flown by.

Greg

McBride: Yeah, it has. I mean, we're— I remember the last time we talked, it was, you know, what's planting going to look like? And here we are just a couple of weeks away from the big planting report and all that stuff.

Jeremy

Doetch: So I know, I know, a lot of things going on, probably on both our ends. It's making the calendar fly by. Yeah. So well, listen, I think let's dive right in. You know, we had a WASDE report come out last week. So I thought maybe, you know, give us your insight. Let's recap that, you know, talk about any surprises if there was any. So what's your thoughts on this last week's WASDE?

Greg

McBride: Yeah, so the beans for their part are easy because they generally take this June report as a little bit mild. There was no major changes expected. You look at the old crop situation, and we've been just kind plodding along, the export demand is basically right where it needs to be. Maybe we miss by 10 or 15 million bushels, but nothing that's like crazy. So there's no reason for the USDA to change anything with the new crop side of things. We know we're just finishing planting. So you're not going to change production, you're not going to change acres, and maybe you do at the end of the month, but it's kind of a nothing report for beans. On the corn side of things, you look at the old crop, we know the export demand is phenomenal. Absolutely phenomenal. At this time of the year, we shouldn't be selling as much as we are. But it's, it's kept going here.

So you continue to see that number, that export number should go up. And it did, it went up by 50 million bushels. The estimate was for like 25 million. Over here at Allendale, we were seeing anywhere from 50 to 125 million. Well, they gave us 50. So good enough. They just given what we saw in this last week's report, they could make another change on the July report, maybe even go into the August one and raise it by another 50 to 100 million bushels. And we'd be okay with that. All it does for us is say that we're underpriced. You're sitting at $1.7— $1.75 billion for the new crop and you're at $1.36 for the old crop. Sitting down here at this $4.40 level that we've been trading literally for the last 6 weeks. It's severely undervalued.

Jeremy

Doetch: Yeah, yeah. No, I would agree. And you know, the other thing that, you know, I don't know, I don't want to say it was a surprise, but I know there was an adjustment to the wheat export too, wasn't there?

Greg

McBride: Yeah, they raised new crop wheat exports by 25 million bushels very early in the year for them to do that. But that's fine. We'll take that. That's friendly. The expectation was for maybe no change to maybe maybe 5 million bushels lower. So adjusting by 25 million bushels helps us out. The wheat market is still one of the most frustrating markets out there. You saw you ground higher for literally 2.5, 3 weeks in that wheat market. And you took it all the way in 2 days earlier this week. And you got a good, a good amount back today or on Friday. But, you know, it's, it's still a situation where this wheat market is being priced versus corn for feed rather than looking at it as like a milling quality or a premium quantity at this point.

Jeremy

Doetch: Yeah, yeah, yeah. No, I thought it was, you know, all the commentary I've been seeing is that there wasn't really any surprises with the WASDE. Not a lot of excitement around it. It kind of was what we thought it was going to be. This time of year is what is really kind of what we thought, right?

Greg

McBride: Yeah, absolutely. And I mean, a lot of people kind of going into option expiration on the, the, at the end of this week and really everybody wants to set their sights on that June 30th report.

Jeremy

Doetch: Yeah.

Greg

McBride: So the June WASDE report, while we tend to really get amped up about those, when you've got this big quarterly report at the end of the month, you kind of set your sights a little bit further out.

Jeremy

Doetch: Yeah. Okay. Well, let's, since there's not a heck of a lot of excitement in WASDE, let's move on to crop conditions. What are you hearing? You know, just in the whole Corn Belt, or, you know, kind of around here, what are you hearing on crop conditions? I'll give you, you know, maybe Dutch Farms crop conditions here when you're done. But, you know, what's the Corn Belt saying here?

Greg

McBride: Rain makes grain. Some of my, some of my most negative producers that I work with, and they talk about it, you know, you have some of that dryland corn in, or dryland acres in, in, say, Southeast Nebraska. And that's, you know, that's so close to Kansas, where a lot of times it's dry, dry, dry. And for the last few years, it has been, even those guys are super positive about how this crop looks right now. I think, I mean, just where we're at right here, We're in some of the drier areas. Yeah, yeah. I had a producer from down by Harmon, Illinois, that we were talking the other day. And he said, he said, well, we just got some rain, we got 1.2 on Saturday. And I said, we're not that far away from you. We're up by Rockford. And we didn't get hardly anything. I think I don't even know if we got a quarter of an inch at the most.

And it just— he said, yeah, they were up by us for dinner on Saturday night. And about Route 72, that's when the rain cut off. When they went back home, the rain picked right back up at Route 72. And it was, you know, they got really good numbers. But ours is on the drier side. And I'm not going to say it's dry. I'm not going to say it's a drought or anything. But it still looks really good. We've gotten some timely rains, but it's not what, you know, some of these other groups have gotten, you know, all over the place, which is what kind of everybody is talking about how good those rains are. And then you go out to some of those guys in the, in the western side or on the eastern side of things in Ohio, they struggled to get planted because they were so wet. They're finally getting it done. And then just as soon as they get it done, they get a rain on top of it looks good.

I talked to a producer in north central Iowa today that had to replant some beans. Just, just this week. So he's, he's looking at it and saying, well, I mean, at least I'm able to do it now rather than, you know, having all this stuff happen because they got hail. And he's like, at least it didn't happen in 3 weeks or a month when it was too late to go back and replant all that stuff.

Jeremy

Doetch: Yeah, I mean, I would think, you know, I've— what a lot of producers are telling me is kind of a similar mix here. You know, Greg, I mean, there's a lot of— I mean, the Corn Belt's mixed. There's areas that's wet. There's areas that could use rain. You know, I would say you know, my farm, you know, I'm right on the Wisconsin-Illinois state line here. And I would say we need rain, you know, our earlier planted stuff looks good. You know, it's around that V6, V7 range, stuff that was ahead of like an April 30th rain that we got, that stuff looks pretty darn good. It's really taken off. The stuff that was after that in our beans, they're slow. And, you know, I think there's a couple, you know, factors to that. One is, uh, we could use a drink of water. That's, that's number one. Number two is, is that we, we really could use some heat. You know, we have no heat, no humidity.

And I think that's, you know, one of the reasons why it's not raining so much. My dad used to say a lot is that, you know, it would get, you know, you get in those pockets where you get drought and it gets so dry. It just takes all of the moisture outta the atmosphere and all the energy out of it that you can't buy a rain. And I feel like we're heading, I, I don't wanna say we're in that case right now. Mm-hmm. Well, we've had chances for rain. We've had some stuff in the forecast didn't come to fruition. You know, we could use a little bit of heat and humidity in this area. And then, you know, we're still, you know, we see a little bit of remnants of the, you know, Canadian wildfires. And I think that's causing the beans to not harvest as much sunlight, you know, the corn as well.

So I think we're stunted a little bit, you know, and it's putting us in our area a little bit of a precarious position because you've got post-spray that needs to be done on some of your beans. It's kind of a hard call. Like, do we go get it now? We know, well, if we go get it now and everything's growing slow, it's not going to metabolize right, you know, not probably going to have the good kill you want. So you're going to end up spraying it again. But yet, you know, you don't want weeds competing for all the nutrients and the moisture if you're not getting rain either. So, right. You know, I know a lot of guys in my area are kind of faced with that. And I would say that's probably the overall crop condition in the northern Illinois area.

Greg

McBride: So, yeah, the heat situation is, is it's an interesting one because, you know, we always talk about growing degree days, all that kind of stuff. We've had years in the past where we were similar, where it was cooler through May and June. And then you turn on the heat in July and everything still comes through. And we've seen that, you know, you talk about the wildfires and some of the remnants of that. And we've seen that over the last couple of years, too. And it seems like we've done a better job of being able to handle the kind of the tribulations that happen with all this stuff. It doesn't mean we don't need it. But the tough part is when it comes to this, and you know this just as well as anybody, is what happens in July? Do we get that hot and dry run in July? Because that's kind of what some of these weather guys are looking for.

These meteorologists have been talking about this for a long time. Now, The guy that we work with, Drew Lerner out of World Weather Inc. in Kansas City, he's, he's talking about it, but he's not pushing the panic button. He's saying it's going to be a hotter, drier bias, not drought conditions. The problem with that is, though, you know, it could be hot and dry the first week of July, then it cools off or becomes more normalized and then it goes hot and dry that last week of July. And that kind of sweet spot of pollination, it becomes almost perfect conditions. And next thing you know, we've got a bumper crop. And I think that's one of the reasons why you look at the prices. And that's what, that's what the funds are betting against right now is that we're going to have this big crop on 95, 96 million acres. What reason do they have to take this market higher?

Jeremy

Doetch: Yeah, well, I mean, I think you kind of, you know, that's good transition into the segment. I mean, we talked about, you know, given a weather outlook. And I think that's, you know, that's it there. I mean, you know, what you just said, I've been hearing mixed on that, you know, that there's dryness coming. And it's good to hear, you know, your perspective from your guy Drew that, you know, there's maybe a little bit of favoritism for some dry weather, but it's not maybe doom and gloom.

Greg

McBride: Yeah, yeah. And the big thing with, with this is, you know, we look at these, these NOAA maps on a regular basis. NOAA is going to release a mid-month map here that gives us the next 3 months. So we're going to be looking at July, August, September. The last one showed us June, July, August. And when you start to look at the breakdown of those, June was on the wetter side. But when you do in on that last update, June was on the wetter side, but July and August started to dry out. Well, that's kind of what we'll be looking for when they update this, this newest one is, is July, August, September in that drier pocket. And does that— is that going to have an effect? At no point would you look at the markets right now and ever think that we could possibly put some, some weather premium into this market.

Like I said, you've been trading $4.40 now for 6 straight weeks in December corn. Yeah. The funds have decided to go from 200,000 contracts long to 125,000 contracts short right now. So it's going to take out a weather, some weather premium or weather scare for them to kind of just come out of some of those short positions. And that's where you could get that, that rally. And a lot of times we get this rally up right until about June 18th, June 8th to June 18th, which is right now.

Jeremy

Doetch: Yep.

Greg

McBride: And then it falls off because, oh man, it's going to be a big crop. We've, we're getting rain, all that good stuff. And then you get a secondary rally in about mid-July as we're as we're pollinating. So that will be something to really watch. I'm not getting bullish on by any means, but I can tell you just based off of our ending stocks, we are severely undervalued. I mean, we should be $5-ish, $5.25 on December corn right now.

Jeremy

Doetch: Yeah.

Greg

McBride: And we're nowhere near it.

Jeremy

Doetch: Yeah. Well, and so you bring up a good point. And I guess let's, let's switch into the commodity section, wrap up weather and commodities. We're talking corn here. I mean, I, you know, as I look at this today, we're in that— we closed around that $4.05, $4.06, you know, range for new crop. And that's in our local— you know, yeah, cash. Yeah, December cash. Significantly, you know, from what I would say is our average producer's cost of production, it's below that. You know, and so, and, you know, we've got— I'm trying to remember exactly, was it $4.70?

Greg

McBride: What was the guarantee on the dot? Is your spring insurance?

Jeremy

Doetch: Yeah. So our spring insurance, $4.70. You know, cash is trading in that, you know, slightly above $4 range. Cost of production, I would say on average for most of the stuff we're seeing is somewhere in that $4.50 range. I guess, you know, your point of we're undervalued, I think there's a lot of producers here saying Yeah, we are. And we hope it moves. So, you know, I guess, what's your thoughts on corn and strategies here?

Greg

McBride: So I mean, if I, if I, given everything you just said, if I told you to come in and sell corn right now, you'd laugh at me. Yeah. Yeah. I mean, we're talking $4 corn, essentially. And that's, that's in your backyard. That's not some of these guys that are, you know, have a wider basis that takes them to $3.85 or something like that.

Jeremy

Doetch: Correct.

Greg

McBride: If, if hope and pray is a strategy right now, that's kind of where you're at. Long positions are a good way to, to kind of set yourself up if the market does rally. But you also have to keep in mind that if you were to do a long position, how much do you really give it? We've already made a run at that $470. We made $469.50 like a month and a half ago. Yeah. So how much, how much room do you give that to go? Saying that it's, you know, fair value puts you at $5 to $5.25. Last year we said the same thing. It should be somewhere between $5 and $5.25. We made like $4.98 and three quarters and then the secondary rally made you to $4.95 and third rally made you to $4.93. So you had to be aggressive before $5 because every, every producer worth their salt was trying to sell $5. But you can get there. That's board price. That's not in cash.

So, the idea at this point is kind of hang on tight. I mean, from a trading perspective, you're not going to sell it if I told you to sell it right now. You'd be foolish. So, it would be either you do nothing or you take some speculative long positions and try and do something with that. But you got to manage your risk at this time too. You don't want to put money out there when you're already losing money, you know. So it's, it's kind of— I think at some point you have to look at the odds. The odds are that we're going to make a move. A general, general rule of thumb when, or at least average, when we have these, these rallies or this movement in, in corn, $0.86 is the, is the average range that you'll see in a given year. Now, obviously, there's years where it goes significantly higher. A little bit lower. We've traded about a $0.45 range this year. That's terrible.

That's— I mean, that is the low end of that, of that situation. So we need to see this market go higher. And I'm not saying that it will. I'm not saying— I just think it should. But I don't have that, you know, that spark or that catalyst to say this is why it's going to go. Could it be a trade deal? Could it be, you know, all the tariff situation goes away? Could it be, You know, could it be a bigger focus on ethanol by the EPA? Could it be, you know, it could be 100 different things. And that's, you could say the same thing about soybeans. If you look at what soybeans did at the end of this, this past week, or the next $0.20, $0.25 rally, that was all because of the EPA. You know, you start to talk about some of the, some of the stuff going on in the world with Iran and Israel. Well, crude oil makes a $3 to $9 move, but corn just doesn't react to that.

Well, if crude moves and RBOB gas moves and diesel moves, you should see beans, bean oil, corn, all of those should move. But it took an EPA decision this morning or late last week to get that to make that move.

Jeremy

Doetch: Yeah, you could say this morning, I think all of our listeners know we record Friday afternoon. So, you know, today's headline was, you know, the biofuel headline. And so, you know, I think that's favorable. You know, we all think that's favorable for soybeans. And, you know, to put that in perspective, you know, the thing that I think we're seeing with a lot of our producers that work with us you know, we're seeing that $11 or slightly above breakeven. And so we've got a long way to go on beans, you know, to get to profitability levels. So, you know, I guess this is, you know, this is good news. Let's hope some of this comes to fruition and that, you know, it moves the needle a little bit because, you know, if there's one that's just seems like you're just, you know, you can't make the right decision on, it seems like it's soybeans right now.

Greg

McBride: Well, yeah. And I mean, the, we have to realize, and at some point, we will, but we have to realize we are not the biggest game in town when it comes to soybeans. We haven't been for a few years. Brazil continues to plant more, they continue to grow more, they continue to ship more. They account for the lion's share of soybeans in the market. And in the export field. So for us to cut back on acres was the right move. I mean, I hate to say it because soybeans, you know, are a big crop for us, but it probably should come down another 4 to 5 million acres, but we won't do it anytime soon. You remember, wheat used to be a huge deal for us. Yeah, wheat acres are at, you know, essentially 100-year lows. It just— everybody can grow it.

Well, when your main competition is Brazil, and they, they can overplant to the point where it covers any issues that they might have as far as drought in one portion of their country, it offsets that. So yeah, the soybean situation with the biofuels today, fantastic. I mean, there were whisper numbers, if you remember a month, a month, a month and a half ago, we saw bean oil down, down limit for 2 days straight. And beans really took it on the chin. We were up at like $10.70, $10.75, something like that. And the market just collapsed, went back down to, you know, roughly $10.15. And getting us back to that $10.70 mark for the old crop, getting us back to that $10.50-ish area. We're basically at the spring insurance price now. I think it was $10.54, $10.56.

Jeremy

Doetch: Yeah, $10.54, I think is what it was. Yeah.

Greg

McBride: So you get a nice move with that. Now it's a matter of How much more can we get? Because just like corn, we're severely undervalued. 295 million bushels for ending stocks on new crop says that we should probably be somewhere between $11 and $12, $11.50-ish, basically.

Jeremy

Doetch: Yeah. Yeah. And, you know, no, I hear you. And, you know, we talk cash prices here real quick, you know, I'll talk cash prices on beans in my area. You know, We're— and this is what's really odd about this. At this point in time, I'm looking at about 6 different grain elevators that are locally here, and the range, the highest cash bid for November beans is $10.03, and the lowest I saw was like $9.87. So there's a little bit of a range there. You know, the basis, basis is pretty wide yet on some of that. Even if we do get some market movement, you know, we need to see a little bit of the basis improve as well.

Greg

McBride: Yeah. Are you able to see where it was at, say, 3 days ago, 5 days ago, or do you remember?

Jeremy

Doetch: No. You know what? I admittedly, we've been, you know, finishing up side dressing. So, you know, we've been kind of in that mode. I wasn't looking at some of the cash bids. I've got to go through a bunch of my text messages. So I don't recall what it was 3 days ago.

Greg

McBride: So talking to some of my producers out there, I've talked to 2 guys in Minnesota today, Nebraska, talked to a few in Illinois too. They're all starting— actually in Ohio too. They're starting to see their basis widen out again. Yeah. And that makes sense from a seasonal standpoint, just the same way as it does for corn. About the June 8th through June 18th is where you seasonally peak. Well, what else? What else happens? You've got option expiration for that June contract when it comes to your old crop. Well, if you haven't let your beans go at this point, I mean, this is kind of old for beans. These are, you know, these are grandpa beans. Beans at this point. Yeah, this is a situation where those elevators or those bean processors know that you have to get those beans moved fairly soon. Yep.

And so why do they have to pay up for, for those beans when that market's going to start coming back, coming down seasonally at this time, and option expiration comes up, first notice is right behind that, a week behind that. You've got to make a decision, you've got to push those beans out the door. And they don't have to pay up for it. They're not— we're not running out of beans. I mean, we're still $3.65 on the old crop for beans. So there's beans out there. And that's why at this time of the year, this is playing a dangerous game because as you start to see it widen out, that's when you got to be careful because it could go quick. And just as quickly as you gain 25 cents in the, in the or 28 cents or whatever it was today in the beans, you could take that away in the basis real quick and—

Jeremy

Doetch: Correct.

Greg

McBride: Playing a zero-sum game at that point.

Jeremy

Doetch: Yep. No, I think that's great commentary. So, all right. Well, I guess, you know, let's, you know, I don't know if I'm going to give you wheat, cattle, hogs. I don't know. You pick a couple if you want to talk about them.

Greg

McBride: You can talk about the hogs if you want to, because I know you guys have them in your backyard there. But I try not to play in the hog market. It's one of those that it's tough with having that situation where you have an index, it doesn't trade similar to where you think it should. I think it looks okay. But it's, you know, we're waiting to see if we can get some additional demand out of China. But looking at the wheat side of things, we can talk about the cattle too, because that's a fun market right now. In some cases. The wheat is undervalued, just like corn and beans. I can give you any number of reasons why we could see this market explode higher. Ukraine, Russia continues to amp up. You get that going. We saw that at the beginning of this war, the market went to $12, almost $13.

You could see that happening again, not necessarily that it would go to $12, $13, but you could see that that conflict gets even worse. And then that would— that market would go. You've got dryness over in, in the EU. You've seen their conditions deteriorate for I think the second or third straight week over there. You've got drought conditions in China, those, those drought conditions actually might be relieved a little bit in the next week to 10 days. But for right now, you're still in drought conditions. And that's hurting their overall production. And then the big one here just domestically, look at what's happening down in Texas, Oklahoma, and Kansas, the amount of rain that they've seen over the last 10 days. And then what's, what's still in the forecast for the next 10 days is just astronomical.

This is a situation where you might see, you might see quality concerns over what, what you're going to harvest. Because let's face it, we just started harvest, we're about 4% done as of last Sunday. And you might start to see some issues with just overall production, not just quality, but overall production coming down on that. So that is something to watch. This is not, you know, I always talk to wheat producers at this time that are, you know, they're growing corn, they're growing beans, but in a mode right now where they want rain for their corn and beans, but they want dryness for the wheat. So get harvest done.

Jeremy

Doetch: Yep.

Greg

McBride: Yep. They're coming into this thing wet as all get out. And that's the biggest area for winter wheat. I don't care what you say about, you know, your crop in Northern Illinois. It's not big. No, it means something to you. But it's not big. Those guys in Southern Illinois, in Indiana, in Ohio. Yeah, those are decent acres. But that big crop comes out of Kansas, comes out of Oklahoma. Comes out of Texas. So that's where when you look at the amount of rain that we've seen, and it's, it's not just green and blue, we're talking like purple and orange and yellow with the amount of rain they've seen. Oh, yeah, that's a major setback for a group that actually should be actively harvesting right now. So that's it. That's my, that's my kind of elevator pitch on the wheat.

If you've followed me for any length of time, which you and I have worked together for a long time, Jeremy, I hate the wheat market.

Jeremy

Doetch: Yeah, I know.

Greg

McBride: I hate it. It never does what you think it should. It's always undervalued. It's just because it's at any given point in the world, there's somebody that's harvesting or growing wheat actively. So there's always a plentiful, plentiful supply. And then the cattle market is just one of the, one of the biggest shining stars out there. I mean, cattle and gold basically at this point, they just go, go, go. And I'd be a little bit concerned with the action we saw today. You gapped lower on, on fats and feeders. You did fill one of your previous downside gaps. So the market is still, when it comes to supply and production, that market is still bullish and it's bullish for about the next 12 to 18 months.

Jeremy

Doetch: Yeah.

Greg

McBride: So even if you were to see a setback, it doesn't necessarily mean that that setback is going to turn into a new downtrend. We're not going to see this thing wash out and go to like, you know, $1.20 or anything like that from $2.20. We might see a $20 or $30 drop, but that's still going to hold it, hold an uptrend in the long term.

Jeremy

Doetch: Yeah.

Greg

McBride: So you look at that, you continue in the big— the biggest thing to watch right now is, you know, box beef looks great, but the biggest thing to watch will be the cash cattle. If cash cattle starts to break, that's when the futures will follow. And that's why, you know, you talk to— you talk to producers about, about where their insurance is at or where, you know, their LRP or where their hedges are at. And they might be losing a ton of money on hedges right now. But none of them are going to complain about the cash side of things. They're making money hand over fist. But if it drops back off, say, $10, $12, and we saw 4 of that today, all of a sudden, they start getting a little bit itchy. And those hedges that they have on start looking better. And those hedges that they haven't put on start to make them start losing a little bit of sleep.

Jeremy

Doetch: Yep. Yep. No, I agree. So I guess you gave me hogs. Geez. Well, you're right, we do have hogs. And, you know, maybe I'm gonna get tarred and feathered for saying this, but I'm somewhat long hogs. You know, I'll tell you the last— I feel like the last 3 years, the hog market's just— I mean, it's taken a beating. You know, we've You know, we've been upside down with our cost of production. That's caused, you know, I think a little bit of, you know, sell-off. It's caused, you know, herds and sizes to look at, you know, where the profitable level is. You know, I guess in my mind there's a couple of things, you know, can, you know, I guess questions I have. One is, can the cattle bring, you know, if it continues to go, can it bring hogs with it? May, may not, who knows.

And then the other thing is, is that, you know, if we, you know, obviously a strong consumer does really well for cattle and beef. If that turns around, you know, do they look towards, you know, other proteins that are a little bit, you know, cheaper cost? And obviously pork is in hogs is one of those. So, you know, I kind of look at it and think, you know, and this is, I guess, my justification why I'm a little bit long. I don't see at this point a reason to think that you should be short hogs at this point, because they've taken a lot out of it. They've kind of bled, you know, and I think that, you know, you know, long hogs is probably, you know, the future over the next, you know, 6 to 12 months, depending on, you know, where we go with the, you know, the strength of the dollar trade, all that kind of stuff as well.

So, you know, I don't know, maybe, you know, I'll listen to this 6 months from now and say, gosh, you were really off the mark. But that's kind of where I'm at with hogs at this point.

Greg

McBride: Well, and I agree with you to some points is definitely when you talk about especially pork versus beef, beef prices did astoundingly well through COVID, right? Yeah. Recession, somehow, and this defies all odds and all logic is that the recession never hit the beef nearly as hard as you would think. Yeah, you start to look at those high-priced cuts of protein. And when you're paying $20 to $40 for, for steak, you know, you're paying $7 to $10 for ground beef, that should, that should be enough to kind of drive people away from it. You continue to talk about like the economy, and there's still a lot of concern about these tariffs and what they could do for inflation. Also, what it could do for spinning the economy into a recession. Well, if that's the case, we know that through COVID, we saw credit card debt go through the roof. It was at an all-time high even after COVID.

If that's the case, people get to a point where maybe they can't afford those higher-priced cuts of, of, of protein, whether that's steak or even, even, even ground beef, that's where you should see pork become a feature. Chicken obviously always is an issue. Correct. You know, we know that the situation with chicken too, or even eggs with, with bird flu, you know, so there's, there's concerns there. But the pork just kind of works its way through. It's just a matter of when do people get tired of paying up? Yeah, where is the breaking point? Because if you do spin into a, into a Great Recession type situation, like we did in 2008-2009, that's where you could see that big switch in, and this 5-year period of better, better beef and better cattle prices could give way to hogs. And I'm not saying that the hogs necessarily have to go up from here or pork up from here.

But it could hold a better value than say the cattle or the beef. Yep.

Jeremy

Doetch: Yep. No, I, I, I 100% agree. Cool. Well, I'll tell you what, we've, uh, we've probably gone just a tad long here, but I guess that's probably for you and me anytime we get together and talk, that's, that's kind of normal. Um, so I guess as we wrap up, um, anything to be thinking about here for this next marketing week? Uh, last thoughts or things to consider?

Greg

McBride: Yeah, I mean, watch the situation with, you know, Iran and Israel, what kind of ramifications that has to our markets, because that is a situation where it could lead to a spike in prices. And this is not something where I think it would necessarily be a lasting impact. But if it gave you a good quick spike higher, it'd be one to take advantage of. Prepare yourself for the USDA report at the end of the month. Because quarterly stocks have been a little bit interesting. That's an old crop report. If they, if they drop that corn number by 100 or 200 million bushels more than what's expected, that could be your spike to, to get a nice quick rally. And I'm saying quick, like days, not weeks or anything like that. And then on the soybeans right now, I just don't have anything outside of trade deal, because we're not necessarily paying that close attention to weather just yet.

That doesn't come until you get to later into July and early August. So beans could have a, you know, a good plod along higher with some of this biodiesel stuff. Some of that could help. Obviously, it helped to close out this week. So I think the big thing is really just kind of watching watching to see what kind of follow-through we get in the macro markets here to give us a reason to go higher. You just hit the lowest point in the dollar that you've hit since 2022. So that could be a help because that's one of those reasons where you look at why we've been selling corn at such a good clip. A cheap dollar helps. It really does. And you see what we do against the Brazilian real and it gives us a reason to continue to see some of those sales. Maybe it bleeds over into the beans.

But that's, that's what I'm looking at going into this week is, you know, I would, I think any, any spikes that you get, you have to, you have to get active with it. And don't just, don't just look at your, at your new crop and what's in the field, look at what's in the bin, you got to get active at this time, because option expiration is coming up on Friday.. And then first notice follows up that following week. So you know that there will be some active movement, there will be some drops in open interest. And so you're going to need to be active. And if you get a, if you get a spike, you gotta, you gotta move on it.

Jeremy

Doetch: Yeah. Well, I guess my follow-up to that before we close out, Greg, is that, you know, we've been at Ag View been saying this for a long time, and that's know your cost of production. Once you know your cost of production, get some orders in, get them working for you, because to your point, it could be days, you know, it sometimes it it hits overnight. You know, it's not something that in today's world we're seeing stick around for 3 weeks where you've got time to get, you know, to decide on what you're doing. Now's the time to know your cost of production. Once you know it in, let's get some offers in, get them working for you.

Greg

McBride: Yeah, one big thing as we close it out, just as you know, something interesting to look at on the corn chart, go up to the, go to the December corn chart, pull it up and take a look at all the way back to December. Remember that, that rally that we had from basically November to the end of February? Any rally that we've had in corn has not lasted more than 4 days. Yeah, every single rally, every— and, you know, we've had, we've had it where it goes 3 or 4 days, then we'll have a down day, then we'll have another 2 or 3 days. But every rally really in the last 2 months, 3 to 4 days, and then it falls right back off and it continues that downtrend. So you got to be very careful about that. That kind of stuff.

Jeremy

Doetch: Yep. Well, I think that's, uh, I think that's really good advice. Uh, so I guess we're going to close this out. Uh, you guys have been listening to, uh, Greg McBride. Yeah, sorry, Greg McBride here at the, uh, Allendale Incorporation. He's a director of brokerage. I'm your host, Jeremy Dutch, with Ag View Solutions. And we, Greg, we really appreciate you being on. We'll have you on again.

Greg

McBride: Thanks, Sher.

Jeremy

Doetch: All right, thanks guys.